Foreign exchange reserves hit new high

The nation added US$440 million to its foreign exchange reserves last month, bringing total reserves to a record US$400.77 billion, the central bank said in a statement yesterday.

The slight increase in the foreign exchange reserves last month maintained Taiwan’s position as the world’s fourth-largest holder of foreign exchange reserves, behind China, Japan and Russia, the bank’s data showed.

China had about US$3.2 trillion in reserves as of the end of June, followed by Japan with US$1.15 trillion last month and Russia with US$471.9 billion as of July 1.

“The level of foreign exchange reserves showed a moderate increase in July because returns from the management of reserve assets were partly offset by the depreciation of the euro against the US dollar,” the bank said in a statement.

The market value of securities investments and deposits held by overseas investors, equivalent to 60 percent of overall reserves, reached US$238.6 billion last month, down from US$246.4 billion the previous month, the bank said.

Taiwan relies on sizable foreign exchange reserves to protect the value of its own currency and to serve as a safety net in case of a financial crisis or market volatility, since it is not a member of either the IMF or the World Bank and it cannot rely on these organizations or their member countries for financial aid.

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